Mukesh Ambani’s Reliance Retail is investing $200 million in instant delivery startup Dunzo, making it the single largest shareholder in Dunzo with a nearly 26% stake.
“We are seeing a shift in consumption patterns to online and have been highly impressed with how Dunzo has disrupted the space,” Isha Ambani, a director of Reliance Retail Ventures, said in a statement yesterday (Jan. 6, pdf). Reliance Retail is the retail unit of Reliance Industries, and operates the conglomerate’s grocery business, as well as specialty stores.
Reliance and Dunzo did not reveal the Bangalore-based startup’s valuation as result of the financing round. But an estimate based on the size of the stake going to Reliance suggests a valuation of around $775 million—way more than $300 million the company was at last year.
With the latest acquisition, Reliance will be in direct competition with retail rival Amazon, which has a similar service called Amazon Fresh for quick grocery delivery. Other Indian players in this emerging space include the food and grocery delivery app Swiggy, the new unicorn Blinkit (formerly known as Grofers), and newly founded players such as Zepto.
The startup, which is also backed by Google, is currently operating in seven markets and plans to get into 15 new cities with the help of the freshly infused capital by Reliance. The delivery startup promises delivery of produce and other daily essentials within 15-20 minutes.
The companies said Dunzo will handle “hyperlocal logistics” for Reliance’s retail stories, as well as help with last-mile delivery for JioMart’s network of neighborhood merchants.
The Dunzo investment is the latest in a series of acquisitions by Reliance Retail in the last three years.